SNB Delivers Good News After Bleak Week

By

Neil MacLucas

Jan 13, 2012 7:41 am EST

Reuters

In a week which began with the surprise resignation of its president, Philipp Hildebrand, in the aftermath of his wife’s controversial currency dealings, the Swiss National Bank delivered some good news as the markets headed into the weekend.

Switzerland’s central bank said it expects a 13 billion Swiss franc profit for last year, of which 1 billion franc will be passed on to the country’s 26 cantons, or regional governments, and most of the rest will be used to top up its reserve positions.

The SNB had warned last year it might not be able to dole out any money to the cantons due to the volatility of the currency markets.

The provisional 2011 “book profit” follows on the heels of a 19 billion franc “loss” the previous year, incurred largely as the SNB bought up large quantities of euros and dollars as it strove to check the franc’s stellar rise in 2009 and 2010.

Only when the SNB moved in September last year to set a floor for euro-franc at 1.20 did the franc ease back, boosting the value of its foreign currency reserves.

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